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NEWS

November 21, 2013
Chapter 11 Plan Confirmed for Trinity Coal Corp. and 15 Affiliates with $156 Million Exit Financing

 

New York, NY, November 21, 2013 – Trinity Coal Corporation and its 15 affiliates have successfully obtained confirmation of a Chapter 11 Plan of Reorganization in their Chapter 11 bankruptcy cases pending in the United States Bankruptcy Court for the Eastern District of Kentucky.  Trinity was represented in the Chapter 11 cases by Curtis, Mallet-Prevost, Colt & Mosle LLP and Bingham Greenebaum Doll LLP.

The Debtors own coal mining operations in Kentucky and West Virginia and employ a total of about 115 people.  The cases began as involuntary proceedings when, in February 2013, two groups of creditors filed separate involuntary petitions under Chapter 11 against the Debtors, first by vendors who were owed approximately $25 million, and then by senior secured lenders who were owed more than $165 million.

The Curtis lawyers worked hand in hand with the Debtors’ financial advisors and investment bankers, Moelis & Company, guiding the Debtors first through a sales process, for which the Bankruptcy Court approved an auction process and the Debtors’ assets were shopped to potential buyers, and then through a plan of reorganization process which culminated in the confirmation of the Plan on November 8, 2013. 

Curtis and Moelis achieved across-the-board support for the Plan, though the cases began with discord among the Debtors and their lenders and other parties in interest, including vendors, equipment suppliers, sureties, state and federal regulators, taxing authorities and others. 

Pursuant to the Plan, Essar Global Fund Limited, who indirectly owns the Debtors’ non-debtor parent, will provide exit financing of more than $156 million for which Essar’s affiliates will receive all of the stock of the reorganized Debtors and other consideration upon closing which is expected to occur on or before January 31, 2014.

The Plan was accepted by holders of claims representing more than $326 million in the aggregate, and more than 96% of the unsecured claims, with less than $5 million voting to reject the Plan.  All parties supported confirmation of the Plan before the Bankruptcy Court except for one detractor whose objection was overruled at the contested confirmation hearing on November 8, 2013.

The Debtors plan to emerge from bankruptcy under the Plan with a deleveraged balance sheet and continued coal mining operations in West Virginia.  All administrative and priority claims will be paid in full, and a liquidating trust will be created for the benefit of the holders of General Unsecured Claims (GUC).  The GUCs are estimated to receive from $0.15 to $0.25 on the dollar under the Plan, rather than zero if the Debtors had been liquidated.

The lenders were represented by Haynes and Boone, LLP and Fowler Bell PLLC.

Essar was represented by Shearman & Sterling LLP.

The Official Committee of Unsecured Creditors was represented by Foley & Lardner LLP and Sturgill, Turner, Barker & Moloney, PLLC.

The Curtis team of lawyers advising Trinity Coal was led by partners Steven J. Reisman, Jerrold L. Bregman, L. P. Harrison, 3rd, and associates Dienna Ching, James V. Drew and Cindi M. Giglio from the firm’s Restructuring and Insolvency group; partner Evan S. Borenstein and associates Joshua Geller, Danny Philips and Lisa Bonfield from Curtis’ Corporate group; partners Turner P. Smith and Jonathan J. Walsh of the Litigation department, and partner Eduardo A. Cukier and associates Thomas Reilly and Sarah E. Ryan from the firm’s Tax group.

The Moelis & Company team was led by Managing Director Jared J. Dermont, Senior Vice President Carlo De Girolamo, Vice President Rahul Katoria, and associates Gregory Doyle and Andrew Swift.

The Curtis Restructuring and Insolvency group advises debtor companies, creditors’ committees, secured and unsecured creditors, financial institutions, equity owners and investors, trustees, liquidators and court-appointed fiduciaries, and foreign and domestic governmental agencies in all types of restructuring and insolvency matters both in and out of court.

Curtis, Mallet-Prevost, Colt & Mosle LLP is a leading international law firm providing a broad range of services to clients around the world. Curtis has 15 offices in the United States, Latin America, Europe, the Middle East and Central Asia.  The firm’s international orientation has been a hallmark of its practice for nearly two centuries. For more information about Curtis, please visit www.curtis.com or follow Curtis on Twitter (twitter.com/curtislawfirm) and Facebook (Facebook.com/Curtis.Careers).

 

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